AQR Olivias Personal Balance Sheet & Annual Rate of Return Questions Need all 14 questions answered correctly on my AQR assignment. 1. In the longterm, whi

AQR Olivias Personal Balance Sheet & Annual Rate of Return Questions Need all 14 questions answered correctly on my AQR assignment. 1. In the longterm, which investment vehicles historically provide the greatest annual rates of return? (1 point)
Government bonds and U.S. Treasury bills
Large company stocks and government bonds
Small company stocks and large company stocks
U.S. Treasury bills and small company stocks
(1 point)
2. Jose is 40 years old and has had a retirement portfolio for 15 years. He still has about 27 years to go
before retirement. Which breakdown of investments would a financial advisor most likely suggest for
Jose at this point in time?
0% high-risk; 10% medium-risk; 90% low-risk
10% high-risk; 20% medium-risk; 70% low-risk
30% high-risk; 45% medium-risk: 25% low-risk
70% high-risk; 25% medium-risk; 5% low-risk
(1 point)
3. Brenton invested an average of $250 per month since age 39 in various securities for his retirement
savings. His investments averaged a 6% annual rate of return until he retired at age 66. Given the same
monthly investment and rate of return, how much more would Brenton have in his retirement savings
had he started investing at age 25? Assume monthly compounding.
$44,520.00
$79,500.00
$292,795.72
$330,027.55
(1 point)
4. A family from Hong Kong is visiting the United States. Their first stop is a bank, where the following
exchange rate is posted: USD to HKD = 7.78. On this day, how many U.S. dollars will the family get for 10
of their Hong Kong dollars? Round to the nearest cent.
$2.22
$17.78
$7.78
$1.29
(1 point)
5. Lien-Hua is visiting relatives in China. She exchanges 250 U.S. dollars for the local currency, Chinese
Yuan. If the exchange rate that day is USD to CNY = 6.48, how many Chinese Yuan does Lien-Hua receive?
Round to the nearest hundredth.
1,620.00
256.48
385.80
259.20
6. Zabia is an American traveling with a tour group in South America. During a stop in Chile, he purchases a (1 point)
souvenir that is priced at 2,870 Chilean pesos using his credit card. If the exchange rate that day is USD to
CLP = 466.78, which is the best estimate of the charge Zabia will later find on his credit card statement?
$0.17
$3,370
$6
$2,370
(1 point)
7. Leon started making contributions to a Traditional IRA when he got his first job, at age 36. His
contributions averaged $1,900 annually. Leon was in the 35% tax bracket during his working years, when
he continued to make these annual contributions. The average annual rate of return on the account was
6.1%. Upon retirement at age 64, Leon stopped working and making IRA contributions. Instead, he
started living on withdrawals from the retirement account. At this point, Leon dropped into the 25% tax
bracket. Factoring in taxes, what is the effective value of Leon’s Traditional IRA at retirement? Assume
annual compounding.
$122,607.14
$173,536.23
$86,013.62
$99,246.49
8. Megan made contributions to a Roth IRA over the course of 29 working years. Her contributions averaged (1 point)
$2,250 annually. Megan was in the 24% tax bracket during her working years. The average annual rate of
return on the account was 4.5%. Upon retirement, Megan stopped working and making Roth IRA
contributions. Instead, she started living on withdrawals from the retirement account. At this point,
Megan dropped into the 20% tax bracket. Factoring in taxes, what is the effective value of Megan’s Roth
IRA at retirement? Assume annual compounding.
$116,151.82
$163,541.82
$113,541.82
$126,591.82
12. Janelle is a 61-year-old teacher. Her assets and liabilities are listed below. What is the total value of her
liabilities?
(1 point)
Home Value
$242,600
Mortgage
$3,609
Credit Card Balance $2,769
Checking Account $40,255
Car Value
$17,500
Real Estate Investment $93,818
Retirement Portfolio $475,223
Money Market Account $193,241
$6,378
$199,619
$1,062,637
$1,069,015
13. Shown below is Olivia’s personal balance sheet. Use the information to determine Olivia’s net worth. (1 point)
Personal Balance Sheet
Assets:
Home Value
$446,268
Car Value
30,679
Checking Account
7,4
401(k)
63,192
IRA
11,109
Mutual Funds
58,370
Bonds
3,354
Liabilities:
Home Mortgage
$370,615
Car Loan Balance
4,495
Student Loans
7,421
Credit Card Balance
2,816
Net Worth
?
-$235,096
$620,443
$235,096
$1,005,790
9. Kirby pays an annual premium of 5925 for automobile insurance, including comprehensive coverage of (1 point)
up to $250,000. He pays this premium for 5 years without needing to file a single claim. Then he gets into
an accident during bad weather, for which no one is at fault. Kirby is not injured, but his car valued at
$17,800 is totaled. His insurance company pays the claim and Kirby replaces his car. If he did not have
automobile insurance, how much more would have Kirby paid for damages than what he had invested in
his insurance policy?
$22,425
$4,625
$16,875
$13,175
(1 point)
10. Leroy bought a homeowner’s insurance policy when he purchased his new home. He pays an annual
premium of $825 for property coverage of $300,000 and liability coverage of $400,000. His deductible is
$1,400. Leroy pays this premium for 14 years, at which point Leroy’s dog bites a neighbor walking down
his sidewalk. The neighbor sues Leroy for $22,000 in medical bills and pain and suffering. Leroy submits
this as a claim to his homeowner’s insurance company. If the claim is approved, how much will Leroy’s
insurance company pay the neighbor?
$10,450
$22,000
$21,175
$20,600
(1 point)
11. Matthew is a 34-year-old medical student. His assets and liabilities are listed below. What is the total
value of his assets?
Student Loans
$51,884
Car Value
$28,840
Savings Account Balance $2,617
Medical Equipment $8,320
Electronic Equipment $9,765
Credit Card Balance $5,749
Checking Account Balance $6,904
$57,633
$49,542
$62,195
$56,446

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